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Apple's Next Big Thing Is Small, Wearable, And Could Kill The iPhone

This article is more than 6 years old.

Apple's "one more thing" yesterday was the long-awaited, all-new iPhone X: a stunning piece of technology with fantastic performance, precision design, and -- at last -- a breathtaking OLED display. But while everyone walked away agog about what Tim Cook called "the biggest leap forward since the original iPhone," it wasn't truly the most important announcement Apple made yesterday. Yes, it will sell by the tens of millions, hundreds even, and it will provide the bulk of Apple's profits for years to come. But despite all the marvels inside iPhone X, it's ultimately still a slab of glass and metal you hold in your hand. Apple is already looking to the day when that's no longer the way people interact with their devices.

Apple

This might come as a radical notion with more than 1.2 billion iPhones sold and with Apple poised to cross the $1 trillion mark in iPhone revenues sometime in the coming year, but the future will be worn and not held. And that makes the new Apple Watch with built-in cellular functionality the real product to, ahem, watch in the months and years ahead. The waves it makes in 2018 might seem like mere ripples, but Apple is poised to lead a tsunami of change in communication as we enter the next decade.

What hath Watch wrought?

To say Apple Watch hasn't been a blockbuster is first order understatement. But the idea it isn't a success belies the fact that around 30M have been sold to date and it's likely that around 1 in 20 iPhone users already have one. While critics imply no one likes the Watch, Apple says customer satisfaction is 97% -- in line with many of its other products.

And Apple hasn't made it entirely easy to love. The software has gone through significant revisions since the first Watch was introduced in 2015. In fairness, the original OS was a disaster with too many navigation paths and too little performance. But most of that is a distant memory as the interface has been streamlined, speed has improved markedly, and Apple has better dialed in what people use the Watch for: fitness tracking, notifications, Apple Pay among them.

Of course, it's also been tethered to the iPhone with little ability to do more on its own. Until now, that is. Series 3 will offer better performance and a new OLED screen that's more than twice as bright as the Series 1. But that's just frosting on a cake now filled with a cellular radio option. Surprisingly, it supports not just 4G LTE, but also UMTS, the 3G variant that supplanted GSM -- once the world's most popular mobile phone standard. That gives the Watch access to scores of cellular networks around the world, though initial support will be limited to only some carriers and countries.

With the new radio on board, your Apple Watch will be capable of making and receiving phone calls, streaming music from the cloud (Apple Music support comes at launch but there's no technical reason Spotify couldn't ultimately be supported), messaging through any app ported to the phone, e.g. WeChat. Oh, and with access to the internet, Siri will work too. She's better than you might expect given the tiny microphone, often capable of taking dictation on a full text message without error.

Remarkably, Apple has squeezed all of this into a form factor that is nearly identical to the first three iterations of the Apple Watch (while this is Series 3, the first version can be thought of as "Series Zero.") And all this starts at just $399, $429 for the larger-face variant generally preferred by men and many women. Apple claims the battery will run up to 18 hours and allow for a decent amount of talk or music streaming. The Series 2 typically could run two days on a single charge -- and very rarely runs down unexpectedly. That means a step backwards here both in absolute performance and likely the occasional mid-day recharge. But it's still a game changer.

Cook talked about going to the beach without your phone. But on a more normal day you might leave it behind when heading to dinner or a meeting. And you might not miss it.

We are the Borg, will we be assimilated?

The key to making the Watch a phone replacement, however, was announced late last year: the AirPods that are arguably the finest wireless headphones out in terms of user experience. With an Apple Watch on and AirPods in ear your freedom to move about is greater than before and yet the weight being carried has not been lower in the smartphone era. By no means will the experience replicate iPhone, though the 40 million streaming songs available will make the original iPod's "1000 in your pocket" seem like a lifetime ago, as Daring Fireball wizard John Gruber tweeted.

Apple has bet it can reinvent computing before with mixed results, though. The iPad's march to supplant the PC was seemingly a sure thing by 2013, when 74 million sold. That number was down to 43 million over the past year however, a more precipitous decline than PCs have seen over the same period (from a high of 365 million in 2011, PCs dropped to 270 million a year ago.) While Apple is by no means abandoning iPad, it's fair to characterized the ephemeral blockbuster year of 2013 as something of an outlier and it's possible that total won't be eclipsed, well, ever.

But iPad was a bet in 2010 that after more than 25 years of Macintosh, the computing paradigm would shift to the touchscreen model Apple had pioneered with iPhone just three years earlier. (And the theory was mostly correct: Smartphones have supplanted PCs for most people, most of the time, making iPad something of the previous generation too.)

iPad wasn't the first time the company went out on a limb. Just three years after Mac was introduced in 1984, Apple began working on its first "tablet computer", the Apple Newton. While it wouldn't ship until 1993, that was Apple's riskiest product in its efforts to push technology beyond what it was realistically capable of doing. The handwriting recognition on Newton was awful, the screen was ordinary, and the product was mostly a catastrophe.

Steve Jobs killed Newton in 1998 and it would be 12 years before iPad arrived. These decade-ish timeframes make the new Apple Watch especially fascinating. That iPhone X got its moniker because it's been 10 years since the "phone that changed everything" arrived. Apple has noted on several occasions it expects iPhone to continue to be its most important product for another 10.

But that bravado hides some critical realities. Smartphone sales continue to be breathtaking, at around 1.5 billion units annually. Apple gets about 1/6 of that total and could easily continued to do similarly when shipments max out in the next few years. From there, though, the category almost literally cannot grow given the finite nature of human population and the fact nearly every adult will have a smartphone soon enough.

One more thing

What comes next is still a subject of much debate, but there is something of an industry consensus that augmented reality -- the imposition of graphics and images on the real world -- is potentially as big a revolution as the smartphone itself. Apple has excellent AR support coming in the new iOS 11 with ARKit, but it still means looking through your phone to see the altered world.

That will work just fine for now, with clever games and some fascinating apps set to arrive soon. (A deeper look at ARKit and what it means for Apple is coming in a future post). But ideally AR is equally unencumbered, through some kind of wearable glasses -- think: a good, attractive version of Google Glass. Apple isn't ready to roll out its "AR goggles" quite yet, likely because the technology to make them excellent isn't ready.

An Apple Watch with cellular, however, and truly workable wireless headphones are what's in the now. And they signal a future where the iPhone is optional, at least some of the time. That Apple is making such a thing possible is in the best spirit of Silicon Valley: disrupt yourself before someone else does. That it's disrupting the single most successful consumer product in the history of the planet is monumental.

 

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